South African Fintech Sava Secures $2 Million In Pre-seed Funding

South African fintech startup Sava has secured $2 million in pre-seed funding. The investment came from a group of investors namely; Quona Capital, Breega, CRE Ventures, Ingressive Capital, RaliCap, Unicorn Growth Capital, and Sherpa Ventures.

Sava focuses on small and medium businesses in Africa and was founded by Yoeal Haile, Federico Von Bary Landesmann, and Kolawole Olajide. The desire to start Sava came from the need by its founders to serve underserved small and medium services.

Yoeal Haile started fintech startup Aspira in 2017. With Aspira, a lending service, he wanted Kenyans to be in charge by giving them more choice about making purchases on credit. Soon, Aspira had grown a user base and was giving loans worth $1 million on a monthly basis. Aspira’s founder, however, saw a bigger opportunity in extending these services to small and medium businesses (SMBs).

Aspira’s co-founder noticed that retailers on the platform had challenges with their cash flow and couldn’t access credit facilities that could help take their businesses to the next level. These retailers couldn’t go to banks – these financial institutions require documentation, and collateral and have inflexible policies that keep these small and medium businesses on the other side of the financial door. Money lenders or loan sharks were also not a great option as they are far from beneficial to these businesses that are looking to grow. Yoeal Haile saw the need for Sava, a lending service focused on small and medium businesses (SMBs).

“During my time at Aspira, when I was working with about 100 retail partners, I noticed that a lot of them struggle to stay on top of the cash flows and then manage their finances. Most of them were shut out of access to the traditional credit market. Ultimately, with nobody serving them, we saw this as an opportunity to shift from doing consumer finance to doing more SME and business finance,” Sava’s CEO Yoeal Haile said.

Sava operates on a spend management model. The startup identified two major challenges businesses face in regards to reconciliations and managing spending – there is the lack of tools to control spending, and these businesses spent too much time on manual record-keeping and reconciliation which left them at a disadvantage. “The spend management model is a way not only to bring the tools that small, medium and large businesses need to run their financial operating system in the background. But also to be able to capture the data that gives you a full 360 picture of the true financial health of a business. This is a problem globally, but more so in African markets, given that the banks are hesitant to lend in general. When you don’t have a dataset to help support and underwrite these businesses, that combination leads to businesses being shut out and the credit gap continuing to grow yearly. So that’s what we’re trying to solve with what we’re building,” CEO Yoeal Haile said. Sava wants to help businesses control spending using spend management tools, reconcile accounting records, digitize expense reimbursements, and integrate budgets and actual cash flows.

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